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A Bothell ordinance to allow increased residential development in the environmentally sensitive North Creek watershed has been rejected by a state Growth Management Hearings Board.

The case has reignited divisions between the council’s pro-development majority led by Mayor Joshua Freed and his real-estate attorney and Councilmember Mark Lamb and those members who say the pro-growth forces have too strong a hand in the city’s land-use decisions.

Longtime environmental activists in the city challenged the council’s approval of a November 2014 ordinance that reduced standards for preserving forest cover, eliminated limits on impervious surfaces and allowed for more extensive site excavation. They argued the new ordinance would irreparably harm the watershed, about 220 acres that include streams as well as North Creek, which support spawning runs of coho salmon and steelhead.

The activists say the council’s action also raises questions of conflict of interest similar to those raised by Freed’s purchase of part of the Wayne Golf Course for a housing development after the city declined to buy the land. Freed, who later agreed to sell the golf course’s back nine to a conservation group, was cleared of a conflict in that case by an independent investigator.

The more recent case involves Councilmember Bill Evans, who owns property in the area where the environmental regulations were eased. Lamb represented about a dozen homeowners interested in selling to developers, including Evans, after the ordinance was adopted. Neither Evans nor Lamb recused themselves from the vote on the ordinance.

Lamb said he was not providing legal representation to any affected homeowner when the ordinance was passed. And he said Evans wasn’t trying to sell his property at the time.

On Thursday night, at a special council meeting announced 24 hours in advance, the council voted to appeal the growth-management board decision. The vote on the seven-member council was 3-2. Evans left before the vote. Lamb didn’t recuse himself, and he, Freed and Del Spivey voted to pursue the appeal. Tris Samberg and Tom Agnew voted against the appeal.

Lamb invoked a council rule to force Andy Rheaume, who has been critical of Lamb and Freed, to recuse himself. Rheaume, who is running for re-election Tuesday, posted his support of the hearings-board decision on his election Facebook page. Lamb said that disqualified Rheaume from voting on whether to appeal the case.

Both Lamb and Evans are stepping down from the council in December and not seeking re-election.

Some land owners in the watershed protection area support the council’s efforts to allow them to develop their property. Tom Berry said his five acres is more than a mile from North Creek and has no wetlands or streams.

While zoning allows for about eight homes per acre, he said developers over the years have told him the environmental restrictions mean far fewer houses could be built.

Berry, who for 20 years ran Canyon Park Orchard on the property, said he went to the city in 2012 and pleaded with them to ease the restrictions.

“We’re stuck. This is not a wetland. This is not a critical area,” Berry said. And he said he would have been happy to pay Lamb a 3 percent commission on the sale of his property because of his legal expertise and history of representing property owners.

In its July 21 decision, the growth-management board said Bothell’s new ordinance substantially interfered with the city’s legal duty to protect the environment, including critical salmon habitat.

The city of Bothell issued a brief statement after the board decision, saying it “remains committed to balancing the City’s desire to protect this valuable area while allowing environmentally responsible development to occur as required by the Growth Management Act.”

But the hearings board specifically rejected that argument in its ruling. It said there was no statutory authority for the city’s stated goal of balancing protection of critical areas with development.

The decision also blasted the city for failing to support the changes with the best available science, as required by the Growth Management Act.

The challenge was brought by Bothell activists Ann Aagaard, Judy and Bob Fisher and the group, Save A Valuable Environment, organized more than 40 years ago to fight a proposed shopping center that would have rerouted North Creek.

Over the years, the group has won several key rulings including establishing citizens’ standing to appeal government actions, said Aagaard, who last year received an award from The Center for Environmental Law & Policy for her years of advocacy on behalf of critical water resources around the state, including the preservation and restoration of a 53-acre wetland adjacent to North Creek on the University of Washington’s Bothell campus.

The significance of the recent Bothell ruling, she said, was that the growth- management board extended the protections of critical areas to the surrounding ecosystem, including the groundwater that supports the streams and salmon habitat.

“Fish can’t spawn if they don’t have cool water,” said Aagaard, a retired Seattle high- school biology teacher. “Forest cover provides not only shade for the streams but it also promotes slow infiltration of water through the soil … The cool groundwater keeps seeping to the wetlands and streams if the soil isn’t disturbed.”

Tim Trohimovich, with the smart-growth organization Futurewise, said the Bothell ruling “underlines the need to protect not only streams and stream buffers but also the areas that contribute to the value of a working watershed.”

He was critical of the Bothell City Council for passing the ordinance, saying that the majority “didn’t base it on science, didn’t listen to the public, just looked to developers. In my experience, that doesn’t usually produce good policy.”